In this week’s EconMinute, we’re talking about December Labour Force Survey numbers.
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Despite a tight labour market, Canadian jobs growth was reasonably strong in December with employment up 104k (+0.5%) vs November. In Alberta, employment rebounded after losses in November, with growth surpassing expectations to end the year (up 24.5k, or +1.0%), a level of gains not seen since the Spring of ‘22.
Nationally, unemployment dipped to 5.0%, down marginally from 5.1% in November, but significantly better than the 6.5% where it started the year. Though all provinces are now in a stronger place closing out 2022, the biggest improvement was in Ontario, Newfoundland, and PEI.
At this point, with employment likely “full,” it’s a question of how much further unemployment can dip as well as what upset we’ll see due to the Bank of Canada’s increase in interest rates as consumer demand cools.
For Alberta, this leaves the province with the tightest labour market seen in years. The job vacancy rate (# of vacant positions relative to # of people working) remains >5% while unemployment seems to have bottomed out at 5.8%, begging the question of who will fill openings.
Nonetheless, Alberta managed to lead Canada in jobs gains in December, with remarkable growth in full-time positions. Roughly 40k more Albertans were employed full-time in December than November. This gain was only partially offset by the decline of about 20k Albertans working in part-time positions.
What enabled this kind of growth—in an already tight labour market—is that Alberta businesses were able to attract new people to the workforce. Of note, both younger and older workers increasingly filled open positions in December.
Among young Albertans, this was the case for both men and women. However, the increase in participation among young women is especially notable and bucks the trend of the previous decline since June of ‘22.
From an industry perspective, construction and transportation jobs led the gains. Strength in the real estate market, with individuals moving from other provinces, likely explains part of the story for construction, with exceptional strength in the Calgary real estate market.
Employment in construction & transportation is now 5 and 9% higher than in February 2020. But also worth noting is the strength in professional service jobs (e.g. researchers, engineers) which has seen a 26% gain, and tend to represent high-paying jobs.
Another good news story is that a growing share of unemployed Albertans haven’t been job hunting for very long. After a hiccup the last couple months, the number of Albertans unemployed for over a year has continued to decline, and is now on par with the national average.
The one bleak spot for Alberta is wage growth. Wages are up just 1.8% versus last year. Meanwhile, they are up 5.1% nationally. Given continued labour shortages, low unemployment, and high participation, however, wage growth could heat up in 2023.